Panama

Labor Courts in Panama are established by the Labor Code (Código de Trabajo), specifically in Book V. They are structured into Sectional Labor Courts (Juzgados Seccionales de Trabajo), Superior Labor Court (Tribunal Superior de Trabajo), and The Labor Chamber of the Supreme Court of Justice (Sala Cuarta de Negocios Generales, Sección de Trabajo de la Corte Suprema de Justicia). These courts handle individual disputes arising from employment contracts or relationships, disputes regarding the interpretation of collective agreements, work-related injury and occupational disease compensation, recognition of union rights, and labor-related sanctions and fines.

Labor Courts in Panama

Legal Basis

Panama's Labor Courts are established by the Labor Code (Código de Trabajo), specifically in Book V.

Structure

• Sectional Labor Courts (Juzgados Seccionales de Trabajo): Courts of initial instance with jurisdiction over a limited geographic area. These courts usually deal with individual labor disputes.
• Superior Labor Court (Tribunal Superior de Trabajo): Second instance appellate courts with jurisdiction over several Sectional Courts in a region.
• The Labor Chamber of the Supreme Court of Justice (Sala Cuarta de Negocios Generales, Sección de Trabajo de la Corte Suprema de Justicia): The highest labor court, handling appeals against Superior Court decisions and certain other matters specified by the law.

Jurisdiction

• Individual disputes arising from employment contracts or relationships.
• Disputes regarding the interpretation of collective agreements.
• Work-related injury and occupational disease compensation.
• Recognition of union rights.
• Labor-related sanctions and fines.

Process

• Labor proceedings in Panama are oral, fast-tracked, and generally less formal than in other legal areas.
• Initiated by filing a claim with the relevant Sectional Court.
• Evidence presentation, including witnesses and documents.
• The judge issues a decision, which can potentially be appealed.

Arbitration in Panama

Legal Basis

Law No. 131 of 2013 provides the primary legal framework for arbitration.

Arbitration Panels

• Ad-hoc panels: Formed for a specific dispute. Parties select their arbitrator(s) who agree upon a third, presiding arbitrator.
• Institutional Arbitration: Permanent arbitration centers exist in Panama (e.g., the Center for Conciliation and Arbitration of Panama) with their own rules and lists of arbitrators.

Jurisdiction

• Any dispute that is legally "arbitrable" (usually involves economic rights or interests).
• Labor disputes can be submitted to arbitration by agreement within a collective bargaining agreement or with specific consent outside of that framework.

Process

• The specific process depends on whether it's ad-hoc or institutional arbitration. Generally:
  • Arbitration agreement (defining the scope of arbitration).
  • Appointment of arbitrators.
  • Hearings and evidence presentation.
  • Issuance of an arbitral award.

Typical Cases Handled in Labor Courts and Arbitration

Labor Courts

• Unfair dismissal
• Wage and benefit claims
• Discrimination or harassment
• Disputes arising from union activities

Arbitration

• Complex termination issues
• Collective bargaining disagreements
• Interpretation of labor laws in specific contexts

Compliance audits and inspections in Panama are meticulous processes designed to ensure adherence to regulations. The process typically involves planning and scope, fieldwork, analysis, reporting, and corrective action. The auditor or inspector outlines the specific regulations, laws, and standards being assessed, the targeted areas of the business or organization, the period under review, and the methodology.

Fieldwork and Analysis

The auditor or inspector gathers evidence through a thorough examination of documents and records, interviews with personnel at various levels, and observations of processes, systems, and physical assets (if applicable). The findings are then critically analyzed against the applicable regulations. Discrepancies, risks, areas of non-compliance, and potential weaknesses are identified.

Reporting and Corrective Action

A detailed report is created, comprising a clear description of the audit or inspection scope, findings of non-compliance or areas needing improvement, and recommendations to rectify issues and enhance compliance. The audited or inspected entity must then develop corrective action plans to address identified issues, and implement them within specified timeframes.

Importance of Compliance Audits and Inspections

Compliance audits and inspections are essential for risk mitigation, maintaining regulatory standards, promoting best practices, and continuous improvement. They help identify compliance gaps, uphold Panama's regulatory framework, ensure businesses operate in line with industry best practices and ethical standards, and identify areas for improvement.

Entities Conducting Audits and Inspections

Depending on the sector, various entities may conduct compliance audits and inspections. These include government regulatory agencies, independent auditors, and industry associations. Examples of regulatory agencies include the Superintendency of Banks of Panama, which audits financial institutions, the Superintendency of the Securities Market, which regulates securities markets, and the Ministry of Environment, which conducts environmental audits.

Frequency and Consequences of Non-compliance

The frequency of audits and inspections varies depending on the industry and sector, size and complexity of the business, specific regulations, and past compliance history. Non-compliance can lead to fines and penalties, suspension or revocation of licenses or permits, legal action, reputational damage, and operational disruptions.

Reporting Violations in Panama

In Panama, there are several mechanisms for reporting violations. Many companies and government agencies have internal systems for reporting wrongdoing. Whistleblowers are usually encouraged, and sometimes required, to utilize these internal systems first.

The General Authority for Government Transparency and Access to Information (ANTAI) is an independent government agency responsible for receiving and investigating complaints about corruption, mismanagement, and abuse of power in the public sector. Whistleblowers can file reports with ANTAI confidentially.

The Public Ministry (Ministerio Público) is responsible for prosecuting criminal offenses. Whistleblowers can report crimes, including those related to corruption, directly to the Public Ministry.

For specific areas, Panama has specialized agencies where violations can be reported. These include the Superintendence of Banks of Panama for reporting violations in the banking sector, and the Superintendence of the Securities Market for reporting violations within the securities market.

Whistleblower Protections in Panama

Panama has a legal framework for whistleblower protection, primarily found in Law 82 of 2013. This law provides general whistleblower protections within the public sector, including protection from retaliation and requirements for agencies to protect the whistleblowers' identity. Some sectors have their own whistleblower protection laws, such as the banking sector.

Key provisions of Law 82 of 2013 include its scope, which applies to public sector employees who report acts of corruption, abuse of authority, or violations of law. It prohibits retaliatory actions such as firing, demotion, suspension, harassment, and other forms of discrimination. Whistleblowers who experience retaliation can seek reinstatement, compensation, and other remedies.

Practical Considerations for Whistleblowers

Whistleblowers should thoroughly document the wrongdoing, including dates, times, individuals involved, and any evidence. They should consider the severity of the violation, its scope (public/private sector), and the potential risk to themselves when choosing the right reporting channel.

It's strongly advised to consult with an attorney specializing in whistleblower protection laws for guidance. Even with protections, whistleblowers may still face potential risks, especially in cases of high-level corruption.

Panama is a signatory to numerous international labor conventions established by the International Labor Organization (ILO). These standards guide the country's labor laws and regulations, aiming to safeguard workers' rights.

Key ILO Conventions and Domestic Legal Alignments

Panama has ratified core ILO Conventions No. 87 (Freedom of Association and Protection of the Right to Organise Convention, 1948) and No. 98 (Right to Organise and Collective Bargaining Convention, 1949). The Panamanian Labor Code explicitly protects workers' rights to form and join unions, engage in collective bargaining, and conduct strikes.

In line with ILO Conventions No. 29 (Forced Labour Convention, 1930) and No. 105 (Abolition of Forced Labour Convention, 1957), Panama strictly prohibits forced labor. The country's Criminal Code criminalizes forced labor and human trafficking.

Panama has ratified both ILO Conventions No. 138 (Minimum Age Convention, 1973) and No. 182 (Worst Forms of Child Labour Convention, 1999). Domestic laws establish a minimum working age and prohibit hazardous work for minors. The country also has national plans and programs aimed at eliminating child labor.

Panama upholds the principle of nondiscrimination in employment, aligning with ILO Conventions No. 100 (Equal Remuneration Convention, 1951) and No. 111 (Discrimination (Employment and Occupation) Convention, 1958). Its Labor Code prohibits discrimination based on race, gender, religion, political opinion, nationality, or social origin.

Panama has ratified the Maritime Labour Convention, 2006 (MLC), demonstrating a commitment to decent working conditions for seafarers. The MLC has been incorporated into Panamanian law.

Mechanisms for Enforcement and Monitoring

The Ministry of Labor and Workforce Development (MITRADEL) is the primary government body responsible for enforcing labor laws and ensuring compliance with international labor standards. It conducts workplace inspections, investigates labor complaints, and mediates labor disputes.

Challenges and Areas for Improvement

Despite its commitments, Panama faces challenges in fully implementing and enforcing all aspects of international labor standards. Some of the key issues include:

The large informal sector in Panama can make it difficult to enforce labor regulations, particularly related to child labor and minimum wage.

Workers in rural and indigenous areas may be more vulnerable to labor rights violations due to limited access to information and legal protection.

Constraints in terms of resources and inspector capacity can hinder MITRADEL's ability to comprehensively monitor and enforce labor laws.